Exclusive: Philippines May Suspend At Least 10 More Mines Under Crackdown

As part of an ongoing environmental audit, the Philippines has already closed 10 mines and may close several more, affecting the price of nickel. Here, a worker uses the tapping process to separate nickel ore from other elements at a nickel processing plant in Sorowako, South Sulawesi Province, Indonesia, March 1, 2012. Photo: REUTERS/Yusuf Ahmad

The Philippines could suspend at least 10 more mines under an environmental crackdown on the sector, the minister in charge of mining said, in a move that threatens to halt the operations of half the mines in the world's top supplier of nickel ore.

Global nickel prices jumped 2 percent as the country's second-biggest nickel producer warned that more new stoppages would disrupt shipments to the crucial Chinese market and elsewhere. President Rodrigo Duterte has taken a tough line on the industry and warned the nation could survive without mining, while mineral producers have labeled a review of the sector a "demolition campaign".

The Philippines has already halted the operations of 10 mines, eight of them nickel producers, for environmental lapses since it launched an audit on July 8. That has left 30 mines still operating, but Environment and Natural Resources Secretary Regina Lopez said others could be suspended when the agency releases the results of the mining audit on Thursday.

Asked if a further 10 or more mines could be suspended, Lopez said in a text message: "Yes possible."

"We are coming clean here. For decades we have turned a blind eye to the suffering of our people. Not anymore," she said, adding that any decision to halt mines would follow the law.

Lopez, a committed environmentalist picked by Duterte to promote responsible mining, has said miners have to upgrade their operations to limit harm to the environment and local communities.

"They just need to get their act together," Lopez said in the text message.

"MINIMAL EXPORTS"

Dante Bravo, president of Global Ferronickel Holdings Inc, the Philippines' No. 2 nickel producer, said further suspensions would hit shipments.

"Definitely, these suspensions would disrupt supply of nickel ore not only to China but to other markets as well," said Bravo, who expects his company to pass the mining audit.

Bravo said nickel miners, many located in the southern Mindanao island, are also expected to halt operations in October due to the rainy season. "Hence, we would be seeing minimal exports toward the end of the year."

Past environmental disasters, including a 1996 tailings leak at a copper mine in central Marinduque province that contaminated rivers, have spurred mining opponents in the Philippines led by the influential Catholic Church. Miners, however, have questioned the inclusion of anti-mining activists in the audit teams.

The mine closures and the risk of more being shuttered had lifted three-month nickel on the London Metal Exchange to a one-year high of $11,030 a ton on Aug. 10. Prices have since eased, but the metal climbed 2 percent on Monday to $9,915 a ton at 02:45 a.m. EDT. It has gained 12 percent this year.

The Philippines is the biggest supplier of nickel ore to China, where the metal is used to make stainless steel. The Southeast Asian country shipped 34 million tons to Beijing last year, while exports this year have dropped 27 percent in January-July.

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